Microsoft Per Core (with CAL) licensing rules

  • Release version: Australia
  • Updated March 12, 2026
  • 3 minutes to read
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    Summary of Microsoft Per Core (with CAL) Licensing Rules

    The Microsoft Per Core (with CAL) licensing model applies to various Microsoft Server products, including Windows Server and System Center. This model differentiates between on-premise and cloud installations, with cloud licensing following a Bring Your Own License (BYOL) model. Customers can choose to license based on physical cores or individual virtual machines for on-premise installations.

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    Key Features

    • Licensing by Physical Cores: Requires licenses equal to the number of physical cores on the server. Minimum requirements include 8 licenses per physical processor and 16 licenses per server. Device or user CALs are mandatory for access.
    • Licensing by Individual Virtual Machines: Based on virtual cores, with a minimum of 8 licenses per virtual machine. This option requires software assurance or a subscription license.
    • License Mobility: Licenses can be reassigned every 90 days within server farms, with restrictions for Windows Server.
    • Cluster Virtualization Support: Licensing rules apply to clustered environments, where a destination server must be licensed as if a virtual machine were already running on it.

    Key Outcomes

    Understanding these licensing rules ensures that ServiceNow customers can effectively manage their software assets and compliance. By selecting the right licensing approach—either by physical cores or virtual machines—customers can optimize costs and ensure they meet Microsoft’s licensing requirements for their deployments.

    The Per Core (with CAL) metric licensing model is followed by various Microsoft Server products such as Windows Server, System Center, and Core Infrastructure Server Suite. The number of licenses depends on the number of installations and operating system environments (OSE).

    The licensing rules for on-premise installations of these products and the cloud installations are separate. The cloud licensing rules follow Bring Your Own License (BYOL). For more information, see Licensing rules for BYOL and BYOS.

    To license the on-premise installation of these products using the Per Core (with CAL) licensing model, consider the following two options.
    • Licensing by physical cores, also known as licensing by physical hosts
    • Licensing by individual virtual machines
    Note:
    You can either allocate to individual hosts or individual virtual machines, not to cluster.
    You can either allocate manually, or the Software Asset Management application can automatically select the most cost-effective licensing option based on optimization criteria. For more information about how to perform allocation, see Allocation management and how the Software Asset Management application performs automated optimization, see View realized and potential cost-based licensing optimizations for Microsoft.
    Note:
    Both options, whether licensing by physical cores or licensing by individual virtual machines, come with their own set of Microsoft rules that must be followed. For more information, see Windows Server Standard, Datacenter, and Essentials.

    Licensing by physical cores

    The Software Asset Management application supports licensing by physical core rules, introduced by Microsoft in 2016.
    Table 1. Licensing by physical core rules
    Rule Windows Server Standard Windows Server Data Center
    Required number of licenses Equals the number of physical cores on the licensed server

    The physical cores on servers are equal to CPU count * Core count.
    Min licenses required
    • 8 per physical processor
    • 16 licenses per server
    CAL requirement Device or user CALs are required for users or devices accessing the server
    Virtualization rights Rights to use 2 virtual machines if all cores of the host are licensed with the option for license stacking
    Note:
    You must license the host again to get rights to use 2 additional virtual machines.
    		 Rights to run unlimited virtual machines when all cores of the host are licensed
    License mobility within Server Farms (Software assurance benefit)
    Note:
    License mobility isn't available for Windows Server. Licenses can be reassigned to servers as often as every 90 days.
    		 Not supported
    When deploying Microsoft products like Windows Server or System Center (using the core with CAL license model) on cluster virtualization technologies such as VMware vSphere, Microsoft Hyper-V, or Nutanix AHV, the number of licenses required for the physical host depends on the virtual machines that could potentially migrate to it within the cluster.

    Technologies like VMware vMotion, which enables live migration of virtual machines across all hosts, and host affinity, which helps lock virtual machines to hosts within a cluster, manage the movement of virtual machines across hosts. To understand more about cluster virtualization technology and its support on the Software Asset Management application, see Understanding your cluster infrastructure.

    According to Microsoft licensing rules, if a virtual machine with a Microsoft product like Windows Server installed is hosted on one server but can potentially migrate to another, the destination server must be licensed as if the virtual machine is already running on it.

    Licensing by virtual machines

    The Software Asset Management application supports licensing by individual virtual machines rules, introduced by Microsoft in 2022.

    Table 2. Licensing by individual virtual machines rules
    Rule Windows Server Standard and Windows Server Data Center
    Required number of licenses Equals the number of virtual cores on the virtual machine

    The virtual cores on servers are equal to CPU count * Core count * CPU thread count.
    Min licenses required 8 licenses per virtual machine
    Software assurance or subscription license
    Note:
    The option to license by virtual machine is only available with software assurance or a subscription license.
    		 Required
    License mobility within Server farms (Software assurance benefit)
    Note:
    Licenses can be reassigned within the same server farm as often as needed. The 90-day rule applies only when moving to another server farm or cloud provider.
    		 Supported